Property owners have reacted strongly to suggestions that increasing rent supplement by €55 million would serve only to increase their profits.
A proposal to increase Department of Social Protection spending on rent supplement was contained in the new Programme for Government.
However, on Monday The Irish Examiner quoted internal Department of Social Protection documents that said the department was of the view that increasing rent supplement when there is a supply crisis “only benefits the landlords and does nothing to increase the supply of homes”.
The Irish Property Owners’ Association has responded by saying providers of private rented accommodation are being made to look like part of the housing problem, when successive governments had counted on the sector to be part of the solution.
A spokeswoman for the association told The Irish Times that since 2009 a series of government measures had been introduced that were driving property owners from the market.
She said a rule change in 2009 restricted mortgage interest relief to 75 per cent, which unfairly penalised investors in residential property.
This compares with 100 per cent in all other businesses, including commercial property, she said.
She also noted how all rental income is subject to PRSI, regardless of whether the investment is making a profit, and the USC.
“Local property tax, which is obviously a cost, is not allowed as a cost either,” she said.
She said many owners of private residential investments were being forced to switch to commercial investments as a result.
The spokeswoman quoted a report from consultants DKM which found 71 per cent of owners of small numbers of properties were not getting enough rent to pay the mortgages.
Some 70 per cent of such owners said they were preparing to leave the market.
Stephen Faughnan, chairman of the association, said: "Rather than helping the tenants of Ireland, [FORMER]minister [ALAN]Kelly has had a devastating effect on the sector, damaging the availability of accommodation, and causing misery and needless cost to the ordinary tenant, at a time when accommodation is most needed."
Asked for comment, the Department of Social Protection said: “Support under the rent supplement scheme is under consideration by the Cabinet committee on housing in the context of the overall Government commitments to provide affordable, quality and accessible housing.”